Iraq

Phone Code: 00964

Root-level Domain Code: .iq

CIA Info

Background: Formerly part of the Ottoman Empire, Iraq was occupied by Britain during the course of World War I; in 1920, it was declared a League of Nations mandate under UK administration. In stages over the next dozen years, Iraq attained its independence as a kingdom in 1932. A "republic" was proclaimed in 1958, but in actuality a series of military strongmen ruled the country until 2003, the last was SADDAM Husayn. Territorial disputes with Iran led to an inconclusive and costly eight-year war (1980-88). In August 1990, Iraq seized Kuwait, but was expelled by US-led, UN coalition forces during the Gulf War of January-February 1991. Following Kuwait's liberation, the UN Security Council (UNSC) required Iraq to scrap all weapons of mass destruction and long-range missiles and to allow UN verification inspections. Continued Iraqi noncompliance with UNSC resolutions over a period of 12 years led to the US-led invasion of Iraq in March 2003 and the ouster of the SADDAM Husayn regime. Coalition forces remain in Iraq under a UNSC mandate, helping to provide security and to support the freely elected government. The Coalition Provisional Authority, which temporarily administered Iraq after the invasion, transferred full governmental authority on 28 June 2004 to the Iraqi Interim Government, which governed under the Transitional Administrative Law for Iraq (TAL). Under the TAL, elections for a 275-member Transitional National Assembly (TNA) were held in Iraq on 30 January 2005. Following these elections, the Iraqi Transitional Government (ITG) assumed office. The TNA was charged with drafting Iraq's permanent constitution, which was approved in a 15 October 2005 constitutional referendum. An election under the constitution for a 275-member Council of Representatives (CoR) was held on 15 December 2005. The CoR approval in the selection of most of the cabinet ministers on 20 May 2006 marked the transition from the ITG to Iraq's first constitutional government in nearly a half-century.

Economy Overview: Iraq's economy is dominated by the oil sector, which has traditionally provided about 95% of foreign exchange earnings. Iraq's seizure of Kuwait in August 1990, subsequent international economic sanctions, and damage from military action by an international coalition beginning in January 1991 drastically reduced economic activity. Although government policies supporting large military and internal security forces and allocating resources to key supporters of the regime hurt the economy, implementation of the UN's oil-for-food program, which began in December 1996, helped improve conditions for the average Iraqi citizen. Iraq was allowed to export limited amounts of oil in exchange for food, medicine, and some infrastructure spare parts. In December 1999, the UN Security Council authorized Iraq to export under the program as much oil as required to meet humanitarian needs. The military victory of the US-led coalition in March-April 2003 resulted in the shutdown of much of the central economic administrative structure. Although a comparatively small amount of capital plant was damaged during the hostilities, looting, insurgent attacks, and sabotage have undermined efforts to rebuild the economy. Attacks on key economic facilities - especially oil pipelines and infrastructure - have prevented Iraq from reaching projected export volumes, but total government revenues have been higher than anticipated due to high oil prices. Despite political uncertainty, Iraq is making some progress in building the institutions needed to implement economic policy and has negotiated a debt reduction agreement with the Paris Club and a Standby Arrangement with the IMF. An International Compact with Iraq is being established to integrate Iraq into the regional and global economy, while recognizing the need to resolve destabilizing security and political conflicts. Additionally, the Iraqi government is seeking to pass laws to strengthen the economy; this legislation includes a hydrocarbon law to encourage contracting with foreign investors and a revenue sharing law to equitably divide oil revenues within the nation. Controlling inflation, reducing corruption, and implementing structural reforms such as bank restructuring and developing the private sector, will be key to Iraq's economic prospects.

Geography Note: strategic location on Shatt al Arab waterway and at the head of the Persian Gulf

Location: Middle East, bordering the Persian Gulf, between Iran and Kuwait

Natural Resources: petroleum, natural gas, phosphates, sulfur

Geographic Coordinates: 33 00 N, 44 00 E

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